Real Estate Remodeling at All-Time High
Spending an estimated $210 billion on residential remodeling in 2005, Americans shattered all previous marks in this field. This figure is based on the National Association of Home Builders‘ analysis of recently released third-quarter remodeling spending from the U.S. Census Bureau.
Looking ahead, this trend should continue. The NAHB Remodelors Council forecasts the largest increase in spending in 2006 in more than 10 years to a record $238 billion, a 13.2 percent jump.
“The devastating 2005 hurricanes, combined with a rebound in the rental market, are expected to spur a historically high increase in spending this year as repair work proceeds in the Gulf states and apartment owners renovate properties to maximize rental income,” said Vince Butler, chair of NAHB’s Remodelors Council and a home remodeler from Clifton, Va. “The massive owner equity and low refinance rates that fueled recent growth will continue to drive strong expansion.”
NAHB’s Economics Department recently analyzed the local economic impact of remodeling. For every $100,000 spent on additions and alterations, the local community receives $54,200 in income, $4,900 in taxes and other government revenue, along with 1.01 full-time local jobs.
“The $200 billion remodeling industry is almost exclusively small businesses that operate in local communities,” said Butler. “And we can now confirm that money spent on remodeling stays local.”
Regionally, the South accounts for 31 percent of all remodeling expenditures, with an average of $1,513 spent per household in 2004, the last full year of Census data. Moreover, the residential remodeling market accounts for approximately 40 percent of all home construction.
Many of these efforts take place in order to increase the value of one’s home. If you’re a seller looking to make money off a Florida home loan, improvements to your property may be the way to go.
